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Building for the Next 100 Years Nestlé India Limited • Annual Report 2016

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Building for the Next 100 Years Nestlé India Limited • Annual Report 2016 Nestlé India Limited • Annual Report 2016 Building for the Next 100 Years The Board of Directors of Nestlé India Limited (From left to right) Shobinder Duggal (Director - Finance & Control and CFO) Ravinder Narain (Non Executive Director) Rajya Vardhan Kanoria (Non Executive Director) Ashok Kumar Mahindra (Non Executive Director) Rakesh Mohan (Non Executive Director) Aristides Protonotarios (Director - Technical) Swati A. Piramal (Non Executive Director) B. Murli (SVP - Legal & Company Secretary) Suresh Narayanan (Chairman & Managing Director) Index Message to Shareholders 03 Annexures to the Board’s Report Commitment to Make in India 04 Commitment to Consumers 06 Annexure 1: Report on Corporate 69 Annexure 5: Secretarial 93 Commitment to Business Partners 08 Governance Audit Report Commitment to Society 10 Annexure 2: 78 Annexure 6: Extract of Annual 96 Commitment to Environment 12 Remuneration Policy Return Commitment to our People 14 Annexure 3: Annual Report on 79 Annexure 7: Report on Conservation 106 Corporate Information 16 CSR Activities of Energy etc. Board’s Report 17 Annexure 4: Business Responsibility Annexure 8: Information Regarding Auditors’ Report 33 83 109 Report Employees and Related Disclosures Annual Accounts 38 Dividend Distribution Policy 110 Across this vast vibrant country that is India, there is a trust that we have developed starting 1912 and is still growing. Every day millions of Indians wake up to the taste of our products. We touch the lives of millions each day and are a part of Indian lives. Today we are part of the social fabric of the country. And, we are creating value that can be sustained over the long term for the Company as well as for the Society. 1 Dear Shareholders The year gone by has been a challenging, exciting, Our commitment towards the communities where at times a stressful one, but has been underlined we operate also remained steadfast. One of our by a deep sense of satisfaction. We are a large and key initiatives last year was #EducateTheGirlChild respected food and beverage Company globally and programme that was run in partnership with Nanhi are very proud of the over 100 years of heritage Kali, one of the largest community programs in India. 2016 will always remain a very important imparting education to underprivileged girl children year in the history of Nestlé India as the Company across India. This initiative further strengthened the bounced back to business after the MAGGI Noodles Nestlé Healthy Kids Programme which has already incident. I would like to refl ect upon the powerful reached out to more than 1,00,000 benefi ciaries. sense of purpose that drove our Company and the Believing in the power of our brands to make social underlying value of respect, decency and trust that impact, we changed the packaging of three of our manifested in all our relationships, both internal and most iconic brands to sensitize and draw attention external. It is therefore only appropriate that to the fact that society needs to embrace collective I congratulate all our employees and partners for their responsibility in ensuring that more girls have the belief in the Company, synchronising with its values opportunity to pursue education. This initiative of and delivering on the promise of getting back on using packaging as an agent of social messaging track, at the earliest. Underlying this mammoth effort, was a pioneering one in the history of Fast Moving was the unstinted love and trust of our consumers to Consumer Goods companies in India. Girls with whom I owe a debt of gratitude! It is this TRUST that access to education not only improve their own lives enabled MAGGI Noodles to quickly regain leadership but also bring changes to their families, communities position with 60% market share. and economies. This has been Nestlé India’s humble way of making a small, yet deeply felt contribution to With emphasis on innovation and renovation a cause that is important and vital to our society. backed by R&D expertise, last year, the focus has been on re-energizing existing brands, launching India is changing rapidly and dynamically. The new brands and getting into new categories. The forces of urbanisation, increased experimentation strong and unrelenting efforts across all parts of and attitude towards cuisines, is giving us great the organisation led to an unprecedented over 30 opportunity as a food and beverage Company to new products and variant launches across almost all address the consumers with new offerings. We have categories in a short span of time. We also looked at 2000 brands globally and we will explore ways to reducing dependency on a single brand by ensuring bring them to India. In the coming years, Nestlé India all categories contribute to the overall growth of hopes to be part of our consumer journey through the Company. Today we are more focused on life, through enhancing the nutrition credentials of strengthening our position with higher penetration our many brands, fortifying those that are relevant and sales. Calibrated launches based on geography, and addressing in a small yet signifi cant way the brand, category and channel potential was our health issues facing the society. This gives us vast priority. This allows for trying new ideas and yet opportunities to bring to our consumers in India new manage outcomes better. and exciting offerings at different stages of life. In 2016, we were able to achieve what we did, as we put forward some must-win battles for the Company and considerable effort was made translating them into action. During the year, we worked towards restoring stability at Nestlé India, ensuring double-digit growth, prioritised digital engagement and enhanced media responsiveness. We worked closely with food authorities and collaborated in the areas of “Food Safety and Quality”. Placing consumers at the heart of everything, we introduced Suresh Narayanan 24X7 consumer engagement services enabling direct Chairman & Managing Director consumer connect. Nestlé India Limited 3 Commitment to Make in India Generating employment, harbouring prosperity 3 If there is one word that encapsulates Nestlé’s presence over ten decades in India, it is the word 'Trust'. After India’s independence in 1947, the economic policies of the Government emphasized the need for local production. Nestlé responded to the country's aspirations and set up its fi rst factory in 1961 at Moga, Punjab. Today, Nestlé has 8 factories across India. 1 4 2 4 5 Our People at Factories 1 Moga Factory, Punjab 2 Choladi Factory, Tamil Nadu 3 Nanjangud Factory, Karnataka 4 Samalkha Factory, Haryana 5 Ponda Factory, Goa 6 Bicholim Factory, Goa 7 Pantnagar Factory, Uttarakhand 6 7 8 Tahliwal Factory, Himachal Pradesh 8 Nestlé R&D Centre India serves as a hub for innovation & renovation. Nestlé India Limited • Annual Report 2016 5 Commitment to Consumers Offering Tastier and Healthier Choices Our goal is to delight consumers every day. This is a continuous process, consumer tastes evolve as the competitive environment continues to change. We leverage our expertise in understanding consumer preference drivers with specialized research processes to help us meet evolving consumer needs. 6 We are committed to ensure that our consumers understand how to enjoy our products as part of a balanced diet. We encourage and empower consumers to make informed choices. Nestlé India Limited • Annual Report 2016 7 Commitment to Business Partners Growing together Four generations of Manekias have been a partner with Nestlé as distributors for over 90 years We share an enduring partnership with our suppliers and distributors based on shared values, business ethics and long term commitment. As a result, most of the partners have been with us for long periods of time and have been growing with us. 8 The three generations of Kukreja family is another V.G.R is associated with us for over six decades as proud partner of our distribution system distribution partner Malhotra Brothers has been a partner distributor for over fi ve decades Paras Foods has been a valued partner as supplier for over fi ve decades Over the years Nestlé India has seen the bond getting stronger with many more associates. The relationship continues to grow based on mutual respect, values and trust. Murlikrishna's partnership as a chicory supplier has helped create value for farmers, Murlikrishna and Nestlé Nestlé India Limited • Annual Report 2016 9 Commitment to Society Inspiring happiness, nurturing hope We collect milk from over 100,000 farmers We believe that for a Company to be successful in the long term it must create value for society. We are committed to addressing the needs of the community. 10 We have built over 244 Clean We have constructed over 300 Over 2,000 coffee farmers have drinking water projects benefitting sanitation facilities benefitting over benefi tted through trainings and over 126,000 students 111,000 girl students technical support We have trained over 66,000 women dairy farmers Employee Volunteering Programme is an initiative to sensitise our people towards community development The Nestlé Healthy Kids Programme has reached out to over 184,000 adolescents creating awareness about healthy lifestyle. Nestlé India Limited • Annual Report 2016 11 Commitment to Environment Caring for the future We have consistently emphasized sustainable use of natural resources and non-renewable resources. Within our factories and in areas under our control there is a continuous effort to maximize production while minimizing the consumption of natural resources and reducing waste and emissions. 12 In the last 15 years we have reduced water usage by 53% and waste water by 55% per tonne of production across our eight factories In 2016, we reduced 800 tonnes of packaging material The Zer’Eau project in Moga recycles the water extracted from milk and reuses it for processing, enabling us to save 25% of water use at the factory In the last 15 years we have reduced energy usage by 47% and emissions by 55% per tonne of production across our eight factories.
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